The annual State of Homebuying in Canada report noted that 56% of all purchasers were first time buyers in 2018. This dropped to 47% in 2019.
The tightening of mortgage rules which has been taking place over the last 4 years is certainly having an effect. The never ending rule changes were intended to slow home sales and prices. But like most government interventions, its had the opposite effect.
Last May, CMHC increased all their insurance premiums. The move wasn’t really a surprise to industry insiders. CMHC’s product line has been reduced. No more rental property mortgages. No more refinancing mortgages. No more secured lines of credit mortgages.
Canada Mortgage and Housing Corporation (CMHC) announced they will be increasing the cost of insurance premiums effective May 1st. The premium increase is minimal and isn’t expected to slow the mortgage volumes (see below for cost changes). The move isn’t that puzzling given that CMHC’s most recent financial statements from 2013 show their volumes are down due to the Federal govt mortgage rule changes… but interestingly, profits were up 11% for the first nine months of 2013.
CMHC made $1.27billion as of September 30th 2013. Not bad for a crown corporation that was created to encourage home ownership in Canada. CMHC puts a lot of money in the government coffers. Arrears are lower at 0.33%.. that’s considered extremely low. Some would say this is just a cash grab. But I think it’s just being proactive as taking action before the expected volumes decrease.
CMHC PREMIUMS ARE STILL CHEAPER THAN THEY WERE 10 YEAR AGO